South Africa’s state-run electricity company has threatened to pull the plug on its neighbor Zimbabwe if it fails to clear unpaid debts by the end of May.
The South African firm, Eskom, said that Zimbabwe’s government-run electricity distributor, ZESA Holdings, had failed to keep up with a payment plan agreed earlier in 2017, Zimbabwe’s state-run newspaper the Herald reported. The Zimbabwean firm owes Eskom 603 million rand ($44.5 million), 119 million rand of which is outstanding arrears ($9 million), according to the report.
Eskom supplies 300 megawatts (MW) of power a day to Zimbabwe, according to the HHerald,around a fifth of its daily consumption. Zimbabwe currently produces around 1,051 MW of power per day and imports a further 350 MW to meet demand of 1,500 MW.
Zimbabwe’s economy is in crisis: Unemployment is high and the country is experiencing a shortage of foreign exchange; Zimbabwe has no official national currency after it abandoned the Zimbabwean dollar in 2009 following massive hyperinflation.
The cash shortage has seen Zimbabwe’s government introduce novel measures: In 2016, the reserve bank began printing a pseudo-currency-known as bond notes —which has no value outside the country. The country’s finance minister also recently tabled a bill that would see small businesses be able to use non-property assets, including sheep and cows, as collateral for obtaining loans from banks where the businesses do not have requisite cash.
Eskom’s interim chief executive Matshela Koko wrote a letter to ZESA Holdings on April 24, stating that “no further leniency or accommodation” would be made regarding the unpaid debts and that the South African firm would “curtail supply immediately” if payments were not made by May 31, according to the Herald.
ZESA Holdings’ chief executive engineer Josh Chifamba confirmed to the Herald that the letter had been received but said that “things are under control” and that the payment deadline would be met.
Zimbabwe has witnessed widespread protests over the past year against the state of the economy and the enduring rule of President Robert Mugabe, who has been in power since the country’s independence in 1980.
The Southern African country is holding its next general election in 2018, in which the 93-year-old Mugabe has been confirmed as the ruling ZANU-PF coalition’s candidate. Should he be re-elected in 2018 and remain healthy, Mugabe would remain in power until the age of 99.